Report: Spotify considers restricting biggest releases to paid users as it renegotiates royalties w/ labels

Spotify is contemplating a transfer that might imply a few of its largest new releases shall be restricted to paid customers, in line with a brand new report from Financial Times. The choice would come as a part of a negotiation with file labels that would cut back the quantity of royalties Spotify pays for songs and likewise permit the corporate to arrange for an preliminary public providing, the report claims:

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As a part of the proposed offers, the music corporations have agreed to trim the royalty charges that Spotify pays for his or her songs, in line with folks accustomed to the discussions.

In trade, Spotify would prohibit the most important album releases to its paid tier for a time period — a considerable concession after years of friction with pop stars together with Taylor Swift, who pulled her music from the platform in 2014.

Whereas nothing has formally been determined, the report continues by noting that sources say the negotiations have been ongoing for months and that offers could possibly be signed within the coming weeks. Spotify is presently renegotiating contracts with the three huge labels— Common, Sony and Warner— all of which personal a small share within the firm.

The transfer could be notable as Spotify is likely one of the solely huge music streaming subscription providers that continues to supply a free ad-supported tier, whereas Apple Music and different opponents opted for requiring a month-to-month paid subscription after an preliminary free trial interval. Try our latest comparability of Apple Music versus the competition.

It is also a controversial transfer to limit content material to paid subscribers as Apple Music and different opponents continue to compete for unique releases. A report final 12 months famous Common Music determined it is going to not conform to any single-platform exclusive streaming deals after some controversy surrounding the discharge of high-profile launch of Frank Ocean’s “Blond” on Apple Music.

There have been additionally claims that Spotify was punishing artists that take exclusive deals with opponents, one thing the corporate later denied. Limiting well-liked releases to its paid customers might trigger backlash amongst free subscribers and make Apple Music and opponents appear extra interesting.

Earlier this month Spotify announced that it has now topped 50 million paying subscribers.